Dáil Éireann Debate, Tuesday - 7 March 2017
166. Deputy Shane Cassells asked the Minister for Finance the progress of his plan, which he announced as part of his 2017 budget speech, to extend mortgage interest relief; and if he will make a statement on the matter. [11860/17]
View answerAt present, Section 244 of the Taxes Consolidation Act 1997 provides for tax relief in respect of interest paid on qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012, with relief being available until 31 December 2017. Mortgage interest relief has been abolished for homes purchased since 1 January 2013.
In the Programme for a Partnership Government a commitment was given to retain mortgage interest relief (MIR) beyond the current end date on a tapered basis. As legislation currently provides for the relief to continue until the end of December 2017, it was not necessary to include legislation in Finance Act 2016 to provide for the tapered extension of the relief. However in my Budget speech last October I confirmed my intention to extend MIR beyond the current end date on a tapered basis to 2020. The purpose of the tapered extension proposal is to avoid a sudden significant increase in mortgage repayments for those losing the relief, but instead to withdraw the relief gradually, allowing the mortgage holder time to adjust to the change in mortgage repayments.
Final decisions in relation to the tapered extension of the relief will be considered in the context of my deliberations for Budget 2018, which is scheduled to be announced in October.
A review of policy considerations and potential costs relevant to the extension of MIR was contained in the Income Tax Reform Plan published by my Department in July last year and may be of interest to you. The plan is available at:
http://www.finance.gov.ie/sites/default/files/Income%20Tax%20Reform%20Plan-FINAL_0.pdf.
